StockMarketWire.com - Rolls-Royce Holdings has announced in a trading update that despite improved trading since the half year, it now expects full-year operating profit and FCF outcome towards the lower end of guidance ranges.

The company confirmed it had made progress in resolving Trent 1000 issues, with only one major design fix remaining, and that returning the Trent 1000 fleet to the level of service expected by customers is 'the top priority' of senior management and the board.

As a result of a thorough review of the Trent 1000 programme, Rolls-Royce Holdings is expected to take an exceptional charge on the Trent 1000 of £1.4bn in 2019. This charge will primarily comprise additional cash costs associated with customer disruption and remediation shop visits, and the recognition of future contract losses from a small number of customer contracts.

Chief executive Warren East said: 'In Civil Aerospace, while the Trent 1000 costs remain a headwind, the vast majority of our installed fleet of widebody engines is performing well, with the Trent XWB surpassing our expectations. We have seen growth in ITP and steady sales in Defence.

'In Power Systems, while trading remains healthy, a small number of larger projects have been deferred and as a result we now expect sales growth for the full year in the low- to mid-single-digit range.'

Rolls-Royce said it has continued to deliver on the restructuring plan it announced on 14 June 2018, which is targeting a 4,600 headcount reduction by the end of 2020. In an update on 6 August 2019, it confirmed it had delivered one third of these reductions and expects to deliver more than half of the total programme reductions by the end of this year.

In a separate statement, Rolls-Royce Holdings announced the appointment of George Culmer as a non-executive director. He will join the board with effect from 2 January 2020.

Until recently, Culmer was chief financial officer at Lloyds Banking Group.




Story provided by StockMarketWire.com